Shortly after putting your house on the market, you will likely see your first offers come in. Because many customers are already current homeowners looking to upgrade, their offers are often contingent on selling their own house first. As a seller yourself, you may wonder how to navigate this situation. Do you accept the contingencies, or shoot them a counteroffer? The following crucial information will help you make the decision that’s best for you.

Contingencies come in a few different forms. The safest option for you, the seller, is when the buyer’s property has sold and is in the process of closing. It’s a safer bet that the transaction will go smoothly in the very near future. But what if the house hasn’t sold yet? If that’s the case, you should check to see if the property in question is at least on the market, waiting for a buyer. An unlisted home poses the greatest risk to you, and gives you the most leverage to adding in your own conditions in order to protect yourself. These are some of the most common seller-made conditions:

  • Bump Notice – This allows the seller the most wiggle room. If you receive a better offer, you can give the buyer with the contingency a set amount of time (such as 72 hours) to remove the contingency or forfeit the purchase. If the buyer declines, their offer is bumped or “kicked out” and invalid, allowing you to accept a less risky bid.
  • Backups – With backups, the seller is allowed to accept runner-up offers should the original buyer not meet their purchase agreement obligations. Any strategy that allows you to field multiple offers, such as allowing backup offers, will be particularly beneficial.
  • In Escrow – You can limit contingency acceptance to only offers where the buyers’ home is already pending and in escrow, which means the sale is already on its way to being closed and more likely to succeed.
  • Less Time – The seller may request a shorter amount of time than the contingency originally allowed (e.g. 30 days instead of 90) before the deal is off.
  • Deposit Forfeiture – If a potential buyer cannot close on the house by a specified date, they lose their deposit money. While many buyers won’t take well to this strategy, it’s a valid option that moves more risk away from you and onto the buyer.
  • Refusal – You can, of course, straight-up refuse contingency offers. This will limit your pool of customers, however, so don’t make this decision lightly.

With so many options available, your best bet is to talk them over with a trusted real estate professional. They will have the negotiation experience to advise you in the best direction for your own personal needs.

 

If you are looking to buy a new home and sell your current home, contact me today. I can help you with paperwork and many other issues concerning the sale of your home, and can also show you all the available properties in your desired area and guide you through the entire relocation process.